Spanish textile sector recovering with success of fast-fashion brands

Spain’s textile sector, is beginning to recover with the success of brands such as Zara after a crisis sparked by cut-throat competition from Asia that destroyed a third of its firms in less than a decade.

Thanks to the success of Inditex’s “fast-fashion” brands, along with that of two other major Spanish high street clothing retailers, Mango and Desigual, Spain is a key player in the global fashion sector

Inditex, owner of brands such as Zara, Massimo Dutti and Bershka, easily beat its closest rival, Sweden’s H&M, in terms of earnings last year, booking a bottom-line net profit of over 3 billion euros (S$4.5 billion).

Clothing and textiles account for nearly 3 percent of the country’s gross domestic product.

According to Spanish textile association Texfor, in terms of sector sales, Spain is Europe’s fifth-largest producer behind Italy, Germany, Britain and France.
Texfor calculated that the number of Spanish suppliers of fabric, fibres and accessories such as buttons has plunged by about a third since 2008.

The Spanish sector, like its counterparts in other Western countries, had been hit by fierce competition from Asia, as well as a slump in demand due to the global economic downturn.

Spanish textile firms were slow to innovate and adapt to the increasingly fast-changing demands of the fashion industry, said strategy and marketing professor Antonio Valdivia from the EAE Business School.

The sector is benefiting from Spain’s economic rebound – growth stood at 3.2 percent last year, double the eurozone average – and the disappearance of less competitive firms.

The firms that survived were those that were export-orientated, able to diversify their order book and respond more quickly to customers’ demands, said Mr Manuel Diaz, the head of the CIE, the body that represents Spain’s main textile firms.

Indeed, Spain now ships raw fabric to Morocco – the top destination for Spain’s textile exports – where it is transformed into clothes for major international brands.

After having neglected Spanish suppliers in the past, major retailers such as Inditex have started using them more and more. But there is still room for improvement. The number of Spanish suppliers that it uses has increased by nearly 9 percent since 2012.

Spain’s textile exports, which account for 60 percent of sector-wide sales, rose by 7 percent last year.